Perhaps Riding on Hiccups

People ask, “So if Bayh-Dole isn’t the best possible solution for federally supported inventions, what is?” There are variations–“How can we improve technology transfer under Bayh-Dole?” Or, more of an assertion–“There’s no point in criticizing Bayh-Dole if you don’t have something better to offer.”

This way of thinking is already loaded toward preserving whatever it is that one is doing. One might say it is in its way “anti-innovation.” There’s a particular irony in that, of course–the folks who are most ready to talk about innovation turn out to be the ones most against innovation when it comes to their pet monster Bayh-Dole.

To hold onto this anti-innovation view of Bayh-Dole, one has to accept that Bayh-Dole is even remotely workable. A succession of reports in the 1960s and 1970s argued that a single federal policy governing ownership of inventions made in all federal research contracting was untenable. Even companies and whole industries had widely varying roles for patents, from critical to indifference to worthless. Federal agencies had widely varying objectives and worked with widely varying situations and with widely varying research collaborators–companies with products, companies that did only contract research, nonprofits, university faculty, foundations set up as fronts for universities to administrate grants to university faculty, state governments, universities running federal labs. But instead, for some gawd-awful reason, Congress was induced to produce a law that forced federal agencies to adopt an arbitrary starting point for the disposition of ownership of inventions in all research contracting, regardless of the agencies’ objectives and the circumstances of any given research contract. 

In form, Bayh-Dole merely carves out a default in existing federal statutes regarding inventions. Bayh-Dole did not repeal anything. If an invention falls outside Bayh-Dole, then it falls back into the federal statutes that would otherwise apply. And the critical bit for Bayh-Dole is that Bayh-Dole comes into play for research contracting only when an invention meets the definition of “subject invention”–when a patentable invention is owned by a party to a federal funding agreement, and that invention was made in performance of work under that funding agreement.

The crucial bit is that the party to the funding agreement–a contractor, in Bayh-Dole’s definition–owns a given invention. Contractor owns–then Bayh-Dole’s arbitrary defaults apply. Contractor doesn’t own. Bayh-Dole has nothing to do with it. Then there is the scatter of variations–an arbitrary patent rights clause for companies, another arbitrary patent rights clause for nonprofits, another arbitrary patent rights clause (with the potential for agency creativity built in) for inventors, and a special “extraordinary circumstances” arbitrary patent rights clause now tucked into both the company and nonprofit patent rights clauses when the subject matter of the research involves naval propulsion systems or nuclear weapons. To make sure Bayh-Dole continues to be viewed as uniformly arbitrary, NIST has combined all of these patent rights clauses, but for the one for inventors, into a single omnibus patent rights clause with a bunch of conditionals. That, you see, makes Bayh-Dole “uniform” rather than “flexible.”

More than that, Bayh-Dole merely asserts a default patent rights clause (even though it ends up being four patent rights clauses). Bayh-Dole permits federal agencies to vary from the arbitrary defaults, but to do so an agency has to go through a convoluted procedure that is so difficult and readily contested that as far as I can tell it has been used only once in the history of Bayh-Dole. In the warped thinking that surrounds Bayh-Dole, if federal agencies have not called out extraordinary circumstances with new patent rights clauses, then this indicates how prescient and workable the arbitrary defaults must be. Instead, federal agencies use work-arounds. The NSF cooperative research centers require proposers to adopt a model IP agreement that requires non-exclusive licensing to consortium members as a nudge-nudge wink-wink condition of getting NSF CRC funding–rather than the NSF creating a standard patent rights clause for all CRC contracts. The NIH is reduced to pleading with its university grantees to release research “tools” non-exclusively–instead of creating a patent rights clause that covers the matter clearly for everyone. So much for a uniform practice. A uniform policy that isn’t used is just suckiness.

And as for the arbitrary patent rights clauses themselves, for each of them, in nearly all of their substantive requirements, federal agencies may waive those requirements, may choose not to enforce, may choose not to act on rights provided to the federal government, and for the rest, there’s no one designated to enforce the patent rights clauses and no liability for breach (other than a federal agency requesting to obtain title to an invention–and that, again, is up to the agency–and for most inventions, it just wouldn’t matter). Thus, even if we accept the political fiction that Bayh-Dole is “uniform” because it specifies a single patent rights clause to be used in all federal funding agreements, Bayh-Dole is anything but uniform in practice because the federal agencies don’t have to enforce the patent rights clauses or act on the federal government’s rights under those clauses.

Bayh-Dole is a law that requires the use of an arbitrary contracting clause that applies only when a contractor comes to own an invention made under the contract, and even then, the federal agency doesn’t have to enforce the contracting clause. Oh, and all reports by the contractor that would be directed to the use (or nonuse) of any subject invention are to be kept a federal government secret, regardless of FOIA and regardless of the obvious interest that the general public might have in understanding whether Bayh-Dole was an effective public policy.

The reality is, Bayh-Dole is a dismal failure, unless the purpose of the law is to restore a pipeline of patent monopolies stretching from billions of federal research dollars to the pharmaceutical industry. For everything else, Bayh-Dole simply sucks. It’s not uniform, if uniformity is a sure sign of creative innovation from research. It’s not enforced, if somehow we accept post hoc ergo propter hoc reasoning–whatever is happening is not the result of Bayh-Dole’s patent rights clauses (they mostly don’t operate) but rather because Bayh-Dole exists to be so conveniently and ubiquitously misrepresented and ignored.

There’s nothing to recommend Bayh-Dole unless we firmly believe in public subsidies for university patent brokers, third tier speculators, and monopoly pricing for drugs.

People have heard Bayh-Dole doesn’t suck–without any actual evidence of no-suckiness–and that’s enough for them. If there’s no disputing taste, then there’s also no disputing a lack of taste in one’s federal innovation policies. We have, then, a federal policy on research inventions based on a decided lack of taste. No reason to get excited. And no point in using reason.

But the questions and assertions about changing Bayh-Dole’s approach are loaded another way–they require a comparison between what Bayh-Dole is said to be and what one proposes instead.  Comparisons tend to be the thing that people rely upon when they can’t assess something directly. Instead of considering what might be best, they ask for something to be compared with something else. They will pick the prettier option. So the loaded question is, “What could possibly look much like Bayh-Dole, but be even prettier?” There’s an aura of progress about such an approach. Bureaucrats love progress, because progress means that no one has to admit that they were deeply wrong–everything bureaucratic is good, and the work of the bureaucrat is to make it even better. You know, like the NIST conference themed “Unleashing American Innovation.” We are all innovating greatly, but gosh everywhere innovation is in chains and could be unleashed. Sigh.

But if one proposed something that did not look like Bayh-Dole at all, that would be outlandish–“You are asking us to walk away from something that is wildly successful! How could we possibly know whether the new thing you propose would actually work, let alone be more successful than what we already have?!” And if one proposed rolling back Bayh-Dole to the flexibility of the Kennedy/Nixon patent policy and instead work on specific situations that require special attention, such as just how many nights the NIH should spend in bed with the pharmaceutical industry conceiving of patent monopolies on drugs that make acute conditions chronic, then we appear to be turning our backs on nearly four decades of bureaucratic “progress.” Once bureaucratic and special interest ticks have got their mandibles into a rich flow of dollars, there’s nothing–not even the prospect of even more dollars–that will make them release their bite. Gotta torch their  swollen behinds.

Bureaucrats cannot simply walk away. This is not the Royal Society for Putting Things on Top of Other Things. They require any change to appear as improvements to the thing they have, even if the thing they have doesn’t work, wastes resources, and works against the progress of science and innovation. “This cruddy mess as you call it–this cleverly crafted scheme that we call inspired–if you can improve it, we will listen. Otherwise, STFU–you aren’t qualified to advise anyone.” Thus, they require a comparison, and the new thing to compare must be an improvement on what they already have. Sucks to be a bureaucrat. Sucks more to try to advise them.

On the one hand a tottering world in flight, betrothed to the glockenspiel of hell, on the other hand: new men. Rough, bouncing, riding on hiccups. Behind them a crippled world and literary quacks with a mania for improvement.

Tzara, Dada Manifesto. One might think that dada anarchy would be an awful alternative to the arbitrary, secretive, bureaucratic faux consistency of Bayh-Dole–but if one is interested in expanding scientific frontiers, or in creating tools that people can use widely and readily to conduct research and develop what they imagine, or in providing methods for professionals to try out and adopt, or in assembling new cumulative technology platforms from multiple sources–for any of that, dada anarchy at the federal level would be way more effective than a secretive arbitrary bureaucratic process. In the world of innovation, bureaucrats and their lawyers presiding over arbitrary processes have not figured as key enablers. In the world of patent monopolies, of wresting control from others, of leading fights over money and budgets, bureaucrats and lawyers have their role. If Bayh-Dole is a law for the convenience of bureaucrats, then Bayh-Dole indeed is about as good as it gets.

I’ve had people even go the other way–they accept that Bayh-Dole isn’t the best possible solution, but until someone comes up with something better, then we should stay with Bayh-Dole. Any system, no matter how cruddy, is better than no system. Even if, historically, the best systems for innovation appear to be ones that are vulnerable, even weak–or better, no system at all. Happy opportunism and frequent indifference. Pump up the level of excitement and, hey, rough anyone riding on hiccups looks more likely to do something *innovative* than any bureaucrat tied to a glockenspiel of process such as Bayh-Dole.

Again, the only thing that will get their attention is something better than their cruddy system. They didn’t take the job on the condition that they had to understand it–just keep the system working, and make it look better even if they can’t make it perform better. Thus, the fake history (so the present looks better than a fake past), the misrepresentations of Bayh-Dole (so it appears that they are following the law rather than ignoring it), and the bogus metrics (so meaningless counts of activity–patents, licenses, money–substitute for public benefit arising from use).

Finally, there’s the problem of social proof. University administrators look around and see administrators at other universities changing their patent policies, locking down faculty inventions, claiming wild financial successes, and publishing happily faked but enviable statistics that land them additional state dollars to build more buildings and be even more innovative. They want what those other administrators have–a reputation for innovation, for research excellence, for impact. With reputation comes budget and fiefdoms.

There’s virtually no way, however, an administrator will be allowed to go any direction that’s skew from the status quo. People won’t permit it–other administrators question the advisability of “going it alone.” Faculty inventors demand the same “resources” that other universities provide. Third tier university “boosters” insist that giving them the opportunity to speculate on the future value of patents is just the thing to raise piles of money–90% for them, 10% for the university, natch.

We might propose, then, that as a matter of federal innovation policy, we should prefer an approach that broadens the range of activities, that pushes for new approaches, that at least for expanding the frontiers of science and giving freedom to new initiatives and free competition and free collaboration as well, we need more dada and less arbitrary pseudo uniformity for the convenience of bureaucrats and their patent speculating buddies. That’s right–we need to use bureaucracy to hold back the forces of bureaucracy; we need to enforce Bayh-Dole all the way from the standard patent rights clause down to the inventor and the inventor patent rights clause and preserve inventors’ right to walk away from the patent system, to ignore university bureaucrats and their faux Bayh-Dole claims to inventions, and to make their own freedom-loving, do whatever it might take ways, however much dada that might entail.

 

 

This entry was posted in Bayh-Dole, Bozonet and tagged , , , , , , . Bookmark the permalink.

2 Responses to Perhaps Riding on Hiccups

  1. I want to contribute on the question of the NSF CRCs, not to be argumentative but to add a gloss. For almost a decade (mid-80s to 90s), I helped direct a New Jersey state program that among other granting activity provided matching funds to several I/U CRC centers at Rutgers and NJIT. I spent a lot of time with the industrial advisory boards of the CRCs. I think it’s fair to say it was an open secret that the provision in the center charters for “non-exclusive, royalty-free license” was really not a major factor in convincing companies to pony up the $35-$50,000 that these centers were then charging in annual dues. These companies were there, really, for an early look at university science, and for access to the most promising graduate students and postdocs. The men and women who sat on the IABs and cast their companies’ votes on the research agenda were typically R&D directors or other mid-level R&D managers. They could probably authorize $5,000 payments on their own. But at $50,000, they had to “sell” the center membership to a higher-up they reported to, maybe a research VP, an executive VP, or a COO. Royalty-free was a selling point that seemed to work magic with stupid upper-level management in demonstrating value, but it had few operational consequences and very little to do with the value that the front-line R&D directors appreciated in the CRCs. I never saw a case where any center sponsors sought to avail themselves of this royalty-free license. In fact, I saw one case that was just the opposite. At one center, actually not funded by NSF but structured on identical terms because Rutgers and our state office both liked the model, the staff running a mass spec suite entirely funded by the center made an invention comprising a new attachment to the spectrometer that seemed like it would be useful to the industry involved. It was duly patented by Rutgers and then offered to the members of that CRC on a non-exclusive basis, exactly as chartered. To a person, the IAB members said, and I’m paraphrasing but accurately, “What? Are you crazy? We don’t want to build a mass spec attachment! We just want to run our laboratories using it.” They all felt the attachment would be best commercialized by a small company, and they’d be happy to buy it from that company provided the price was reduced to reflect any royalty that might otherwise have been due to Rutgers and the inventor. So the board decided to circulate a unanimous consent ceding their non-exclusive right back to Rutgers, allowing Rutgers to do the kind of exclusive, royalty-bearing license that you don’t like. It was done with a local company – which still has the item in its catalog and I’m sure has sold way more units than the few demanded by the CRC member labs.

  2. Gerald Barnett says:

    Fascinating bit of historical perspective. Thanks for contributing! I’ve experienced similar things with CRCs and other consortia. Company rationales for participating included access to students and post-docs, a neutral forum in which to discuss technical matters without anti-trust issues, and an early look at new technology. If a non-exclusive license wasn’t there, then the consortium wouldn’t go. But, as you point out, the non-exclusive license itself operated more along the lines of a quit claim or promise of quiet possession.

    At one university I worked at, they had a one-line non-exclusive license in research agreements and a 35-page patent license agreement if one wanted a “license.” There was nothing in between.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.